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Calgary Floods Will Also Affect the Canadian Economy

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on Tuesday, June 25th, 2013 at 9:01pm.

While it's quite apparent that the flooding in Calgary will affect the local economy, economists are predicting that the Canadian economy will also be damaged by the catastrophe. It's hard to measure just how long-lasting and widespread these economic hits will be nationwide but it's easy to say that these floods will cost Calgary billions of dollars.

BMO Capital Markets estimates that the losses due to the flooding are expected to be at least 10 times more than the losses that were seen during the 2005 floods, ranging anywhere from $3 billion up to $5 billion in direct losses. This is not to mention the effect that it will have on other industries including tourism and retail sales.

The gas and oil companies are coping well and production hasn't been disrupted at all. There is no gas or oil flowing through the downtown core and only three pipelines in Alberta were damaged.

While the activity in the city on an economic basis can be expected to slow down on an immediate basis, there will also be extra spending needed to help rebuild the infrastructure here in Calgary.

Right now, smaller businesses that were hit by the floods that don't have the same type of resources as the larger companies do are going to have a harder time getting through this economic downswing. The smaller business owners in downtown Calgary are especially feeling the loss with the power still out and thousands of dollars being lost on a daily basis. In some cases the damage is so severe that workers may have to be laid off while reconstruction takes place.

On a federal level, the government is going to hasten the speed of receiving unemployment benefits to workers that have lost their jobs due to the flooding. The Premier of Alberta has also pledged $1 billion immediately for emergency reconstruction and relief efforts.